662 / 2024-04-30 18:43:41

Corporate social responsibility in assembly supply chains: the role of peer-induced comparison behavior

peer-induced comparison behavior, assembly supply chains, corporate social responsibility, heterogeneous suppliers

In this study, we explore how a supplier's peer-induced comparison behavior affects the assembly supply chain's corporate social responsibility (CSR) investment strategies. Conventional wisdom posits that compared to the case without peer-induced comparison behavior, the case with peer-induced comparison behavior induces worse things (e.g., a weakened willingness to invest in CSR) due to disutility. We build a Nash bargaining model composed of one manufacturer and two suppliers who are heterogeneous in production cost and bargaining power. We consider two types of peer-induced comparison behavior, i.e., disadvantageous inequality and advantageous inequality, and analyze how these two cases affect suppliers' CSR investment strategies. Counterintuitively, we find that under certain conditions, suppliers under the case with peer-induced comparison behavior are more (resp. less) likely to invest in CSR than those under the case without peer-induced comparison behavior when disadvantageous (resp. advantageous) inequality occurs, which we call positive (resp. negative) impacts of peer-induced comparison behavior. Furthermore, a smaller difference in production cost always brings a larger positive or negative impact for suppliers. However, the impacts of heterogeneity in bargaining power on suppliers' CSR investment strategies are complicated and mainly depend on the types of peer-induced comparison behaviors and the value of the difference in bargaining powers. Our results show the importance of understanding peer-induced comparison behavior and supplier heterogeneity.